London Market Open Report

London open: Decent gains posted

Decent gains posted by Footsie after the open with the early pacesetters financials, especially banks, and miners.

Mining giant Rio Tinto is higher despite seeing profits falling by more than half in the six months to June 30 as it felt the impact of sharply lower commodity prices amid tough economic conditions globally.

Pre-tax profits for the period totalled $4.39bn, compared with $9.82bn over the same period the previous year, as sales fell to $19.52bn from $30bn.

Tesco Personal Finance (TPF), the banking arm of supermarket top dog Tesco, is to create more than 800 jobs in Glasgow with the opening of a new customer service centre.

Sterlite Industries, a subsidiary of Indian miner Vedanta Resources, is to increase its offer terms for the purchase of most of the assets of Asarco LLC. The purchase price is being upped by $500m to around $2.1bn.

Support services group Carillion said its joint venture with technology services firm Telent has signed a letter of intent with BT’s Openreach for a support services contract worth in the region of Ł1bn.

Building products group SIG posted a sharp fall in profits as weakness in the construction market persisted into the first half of 2009. Pre-tax profits in the six months to June 30 fell to Ł15.4m from Ł48.5m over the same period the previous year as revenue fell to Ł1.34bn from Ł1.44bn.

Spirax-Sarco saw interim profits tumble 28% as higher impairment charges and challenging trading conditions weighed. Pre-tax profit fell to Ł30.2m from Ł41.9m on sales in the half year that rose 5% to Ł251.6. At constant exchange rates, sales declined 8% against a comparatively strong first half of 2008. The interim divi has been raised 5% to 10.5p.

Wellstream, pipeline products maker for the oil and gas industry, saw half-year profits slide and revised its short term expectations as the timing of awards for production slows.

Cinema operator Cineworld served up an increase in half year pre-tax profit and said the second half has started very well. Profit before tax increased to Ł11.6m for the 27 week period ended 2 July 2009 from Ł8.7m the year before.

Brambles, the world’s biggest supplier of pallets, posted a fall in profits as weakness in the global automotive industry and other sectors hit demand for its products.